Built to fail. New report from Corporate Accountability reveals that carbon offset projects still fail to deliver

Carbon trading cannot be reformed. It will always be a dangerous distraction from meaningful climate action.

In 1988, the first-ever land based carbon offset project was set up in Guatemala. The trees planted in Guatemala were supposed to “offset” the emissions from Applied Energy Service’s new 181 MW coal-fired power plant in Connecticut. But the ideas behind carbon trading can be traced back to 1960 and Ronald H Coase’s paper “The Problem of Social Cost”.

Since then, carbon markets have been promoted by governments and corporations as key to addressing the climate crisis.

A recent report by the consulting firm Wood Mackenzie predicts that “Global carbon markets are poised for transformative growth.” By 2050, Wood Mackenzie estimates that the “carbon offset market will exceed US$150 billion”.

But carbon offsets remain a false solution and a dangerous distraction from the urgent need to stop extracting and burning fossil fuels.

After a series of studies and investigative reports into the failures of the voluntary carbon market, the carbon trading industry set up a series of industry-led initiatives, new methodologies, and standards. These are supposed to ensure that carbon offsets are “high integrity”.

Built to fail

A new report by Corporate Accountability looks at the performance of carbon offsets in the voluntary carbon market in 2024, to see whether there are any signs that the offsets industry is improving.

The authors of the report, Rachel Rose Jackson and Adrien Tofighi-Niaki, write that,

What we found was concerning, but not surprising. Despite ongoing reforms, problematic offsets – with failings that mean they may not deliver the carbon savings they represent – remain the norm.

In 2024, about 208 million carbon offsets were retired, according to data in the AlliedOffsets Database. The largest 100 offset projects retired about 101 million carbon offsets. 47 of these projects had a publicly available BeZero rating. Corporate Accountability focussed its research on these 47 projects.

Titled, “Built to fail?”, Corporate Accountability’s report found that:

• Almost 48 million problematic offsets were retired from 43 of the world’s largest projects in 2024.

• 80% of the carbon offsets retired from the 47 projects included in the report were problematic.

• 93% of the projects that generated the problematic offsets are in the Global South. Five of the projects are in Brazil, the host of the UN climate talks (COP30) in November 2025.

• More than 90% of the problematic carbon offsets were on Verra’s registry.

• 23 of the problematic projects were forestry and land use projects and 15 were renewable energy projects.

• Only four of the 47 projects generated offsets that had a higher than “moderate” likelihood of achieving one ton of CO₂e avoidance or removal.

Corporate Accountability concludes that the voluntary carbon market “continues to largely fail, enhancing the likelihood of global climate action failure”.

Problematic REDD projects

The following are the four REDD projects from the report that generated the most retired carbon offsets in 2024:

• Mai Ndombe REDD project in the Democratic Republic of Congo (9,150,386 offsets retired);

• Katingan REDD project in Indonesia (8,854,608 offsets retired);

• Envira Amazônia REDD project in Brazil (2,665,252 offsets retired); and

• Pacajai REDD project in Brazil (2,035,670 offsets retired).

That’s a total of more than 22.7 million carbon offsets.

Let’s take a quick look at each project in turn.

Mai Ndombe

The Mai Ndombe REDD project has featured several times on REDD-Monitor. The project was developed without a process of free, prior and informed consent.

The baseline deforestation rate for the project was established not by looking at historical rates of deforestation in the project area, but by comparing the deforestation in a reference area 600 kilometres away. The reference area was close to Kinshasa, the capital of DRC. The population density in the reference is far higher than in the Mai Ndombe project area. A 2016 study published in the International Forestry Review concluded that the choice of reference area was “dubious”.

In 2022, journalist Jonas Gerding travelled to Mai Ndombe and wrote an article about the project in the Zeit newspaper. He found that 11 years after the project began, many villagers were asking when they would see any benefits from the project. By then, the Mai Ndombe project had sold 13 million carbon offsets.

Katingan

The massively polluting oil giant Shell promises drivers that they can become “CO₂ neutral” when they buy carbon offsets together with the petrol they buy at Shell’s petrol stations. This promise is, in part, based on the carbon offsets that Shell buys from the Katingan REDD project in Indonesia.

By 2024, Shell had bought almost 9 million carbon credits from the Katingan REDD project.

The forest in the project area is threatened by land conflicts, fires, and a palm oil plantation neighbouring the project.

The carbon offsets from the project are based on a counterfactual baseline based on a story that the forest would have been cleared for acacia plantations if it wasn’t for the REDD project.

A 2020 report by Greenpeace found that,

It is highly probable that the forest would have stored comparable amounts of CO₂ even without the project. The project has merely shifted deforestation to other places in the region.

In 2024, a documentary broadcast by Austrian TV programme ORF found that communities living next to the REDD project could no longer use the forest inside the project area. One villager said that,

“We are no longer allowed to grow anything and we are no longer allowed to get wood to build our houses. That is strictly forbidden. If we cut down a tree, they arrest us.”

Envira Amazônia

The Envira Amazônia REDD project sells carbon offsets to Petrobras, Brazil’s state-run oil corporation, to greenwash its massively polluting operations.

Brazil is in the process of auctioning 172 oil and gas exploration blocks, covering a total area of 146,000 square kilometres. The country has plans to become the world’s fourth-largest oil producer. Plans that are supported by Brazil’s president, Luiz Inácio Lula da Silva.

The project started in 2012. World Rainforest Movement visited the project area in 2018 and found that “Community members were unaware that the project had been ‘approved’ and was selling carbon credits already.”

WRM found that, in common with many areas in the Brazilian Amazon, land tenure in the project area is complicated and disputed. Communities have seen very few benefits from the project.

And the project restricts the use of the forest by local communities, for rubber tapping, for example.

The baseline deforestation rate was set at a completely arbitrary rate. The Nature-based Solutions Brazil Alliance (a carbon trading industry network) commented that “The project’s baseline is not plausible.”

Pacajai

In 1983, the Brinks Mat gold heist saw £26 million of gold, platinum, and diamonds stolen from the Heathrow International Trading Estate in London. Three years later, Kenneth Noye was sentenced to 14 years for conspiring to handle gold from the Brinks Mat robbery. In January 1985, Noye had stabbed to death a police officer who was surveilling his home.

Noye was released in 1994. Two years later he killed a man in a road rage attack. He fled the country but was eventually put on trial in 2000. He was found guilty and sentenced to life imprisonment. He was released from jail in 2019.

An investigation by The Mirror in 2023 found that Noye was living in the head office of a company called Amazon Forest People Limited. That’s the company currently running the Pacajai REDD project in Brazil.

The company was incorporated in the UK in 2020 by Kevin Tremain, Kenneth Noye’s son. In 2020, Noye’s other son, Brett Tremain, was offering 9.5 million carbon credits from the Pacajai project in Brazil. Both of Noye’s sons use their mother’s maiden name.

In 2023, Verra suspended the project. The project developer faces a legal case over land grabbing. And local communities say they have not received benefits from the project.

Despite the fact that the project is suspended, the project is still selling carbon offsets that were generated before Verra suspended the project.